Disagreements over government actions arise almost daily, in economics there are no exceptions. When it comes to the subject of minimum wage, there is no doubt that this subject generates a lot of controversy. The minimum wage not only affects the U.S. economy as a whole, it is also a topic of particular interest to economists. It gives the economist the opportunity to develop new theories, test them and find solutions. The discussion about minimum wage and how it should be managed is one that has been examined throughout history. This analysis of the minimum wage controversy is based on a group opinion using guidelines from research and classroom learning. The minimum wage is the lowest amount that can be paid to an hourly employee. It was established by the Fair Labor Standard Act of 1938. (minimum wage, n.d.) The minimum wage is the subject of ongoing debate among economists. Currently, the Congressional Budget Office (CBO) announced that the minimum wage would increase from $7.25 to $10.10, the first increase since 2009. (CBO, 2014). According to chapter 8, the economist explains the floor price as the “minimum price authorized by law” (Cowen & Tabarrok, 2012, p.147). This is where the government tries to control prices above the market level, at which point the sellers outnumber the buyer. The same goes for the minimum wage, because the supply of labor is greater than the demand for labor. (Cowen and Tabarrok, 2012). Therefore, the minimum wage is a form of price floor that the government has put in place to control the minimum price that should be paid by employers to employees above the market price. So why do we have a minimum wage? The minimum wage began shortly after the Great Depression and gained a foothold with the United States' Fair Labor Standa...... middle of paper ...... economic recovery, low-income households earn more than money and are more motivated to spend it, which means they invest more money in the American economy. Minimum wage issues may not affect all Americans, but for those they do: one might ask why the controversy? There are no simple answers because this battle did not develop overnight. Minimum wage is a very technical thing, research on minimum wage helps determine whether or not it affects employment or unemployment, another issue is that it helps determine if inflation will occur. It is not just about coefficients or simple wage elasticity. Our group argues on different alternatives, at present we believe that salaries should increase gradually. We do not believe that: with the minimum wage, a family is able to maintain its basic standard of living.